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Safe harbour Reform: Land ho?

Submitted by Eloise Menzies on 21 September 2012

Amongst all the pirate talk and seafaring puns swashbuckling around the blog and twitter sphere in the past few days, a different piracy discussion remains on deck with the Attorney-General’s department releasing the submissions to the safe harbour review online last week. The consultation paper for the review came out almost a year ago, in October 2011, with submissions being due by November 2011. This is the first we’ve heard from the department on the review since the closing date for submissions.

The consultation paper had proposed the expansion of the copyright safe harbours regime in Australia, which was introduced in 2006 following Australia signing up to the AUSFTA. In 2006, however, Australia implemented a safe harbours regime which was significantly narrower than that in the US, and in comparable jurisdictions such as Singapore and Korea. As explained in the paper, the government now recognises that the safe harbours scheme needs revision, and has proposed its expansion to include a broader range of service providers and inviting comments on example draft text:

A person who provides services relating to, or provides connections for, the transmission or routing of data; or operates facilities for, online services or network access, but does not include such person or class of persons as the Minister may prescribe in the Regulations.

In the joint ADA/ALCC submission we support the proposed expansion of the safe harbour scheme to mirror the broader definition encompassed by the US safe harbour regime. As described in the consultation paper, we support altering the wording from “carriage service providers” to simply “service providers” to allow the scheme to protect the increasingly wide range of entities offering services such as transmitting data, caching, hosting data and referring users to an online location. The ADA recognises the importance of this broad definition to the range of our members, including schools, libraries, universities and internet and tech companies. The ADA/ALCC submission to the review is available from the Attorney General’s website here, and from the ADA website here.

The consultation paper had also proposed including a power for the minister to exclude protection for a body from the scheme through the regulations. The ADA considers this addition to the scheme unnecessary and argued against its adoption in our submission on the grounds that it is likely to contribute to a ‘chilling effect’ on investment in Australia. As you may be aware, the ADA has recently published research detailing the potential positive effects an expanded safe harbour scheme, combined with more flexible copyright exceptions, could bring to the Australian economy. Two reports, written by Dr Nicholas Gruen and Professor John Houghton of Lateral Economics, find that better crafted safe harbours would make a substantial contribution to Australia’s economic growth and innovation with negligible downsides for rights holders. Over time, the increases in productivity brought about by these changes would add value to the economy of around $600 million per year.

The department has not yet provided any detail on what they will now do with the submissions, but has noted that since the release of the consultation paper last year, there have been significant developments in the area, particularly with the High Court’s decision in Roadshow Films Pty Ltd & ors v iiNet Ltd. They simply note that:

We're considering the scope of the safe harbour scheme in the context of this and other online copyright issues.

Reform of the safe harbours scheme is particularly important in the context of the Australian Law Reform Commission’s Inquiry into Copyright and the Digital Economy. The Safe Harbours scheme was explicitly excluded from the ALRC’s final terms of reference, which means that while it will be increasingly important for these issues to be addressed as a coherent whole, it will also be important for the review to progress independently. Many of the submissions to the review recommended this issue be considered as part of the ALRC’s inquiry, however this was generally in the context of arguments that the need for reform of the scheme had been overstated by the department, and that expanding the definition of service providers protected by the scheme, particularly to include educational institutions, was likely to lead to harm for content creators. A number of submissions considered the timing of the review to be overly hasty considering the pending decision in the iiNet case, and also the SOPA and PIPA bills before the US congress. Given the High Court’s decision in iiNet and the emphatic rejection of SOPA and PIPA by congress earlier this year, these arguments for delaying reform now hold little weight.

The need for reform of the safe harbours scheme is clear, particularly given the disparity between our system and that in the US and Singapore. Strong safe harbour provisions help to create a climate that is conducive to investment, and can also protection institutions operating for the public benefit, such as educational institutions and libraries, who are already implementing systems to ensure to the best of their ability that their users will not use their services for infringing activity. As the rollout of the NBN proceeds, more and more of these institutions are now online service providers and need to be protected.

Despite safe harbours remaining outside of the ALRC terms of reference, it appears the department may still sit on the submissions until it has some more guidance from the review, and also pending the progress of confidential industry discussions to develop a code of practice for industry. This likely means reform may remain adrift for while yet. Submissions to the ALRC’s Issues Paper are due in November, with the final report expected to weigh anchor in November next year.